Common Costly Errors Taxpayers Should Avoid When Doing Tax Returns -

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Common Costly Errors Taxpayers Should Avoid When Doing Tax Returns

April 5, 2021

When filing a tax return, mistakes can result delay in processing, an additional amount of time to receive a tax refund, and sometimes unnecessary penalties. Hiring an Enrolled Agent is usually the best way to avoid making mistakes on your returns.

With this in mind, here are some of the most common errors taxpayers make when filing their returns that you need to avoid:

Missing or Inaccurate Social Security Numbers (SSN), Misspelled Names, and Incorrect Filing Status

Each SSN and name listed on a tax return should appear exactly as printed on the Social Security card. Ensure that you don’t mistype or missed inputting a letter or number because this is one of the most important pieces of information on your return.

Choosing the wrong filing status is also a problem and most taxpayers are unknowingly omitting this mistake. The Interactive Tax Assistant on IRS.gov can help you choose the correct status, especially if more than one filing status applies.

Math Mistakes

$Missing or Inaccurate Social Security Numbers (SSN), Misspelled Names, and Incorrect Filing Status$

Be careful with the numbers on your returns because math errors are some of the most common mistakes. They range from simple addition and subtraction to more complex calculations.

You should always double-check your numbers and calculations before filing.

Unsigned Forms

An unsigned tax return isn’t valid under any circumstance. Also, keep in mind that when filing a joint return, in most cases, both spouses must sign. Exceptions may apply, however, for members of the armed forces or other taxpayers who have a valid power of attorney.

Taxpayers can avoid this error by filing their returns electronically and digitally signing it before sending it to the IRS.

Filing with An Expired Individual Tax Identification Number

If a taxpayer’s ITIN is expired, they should still go ahead and file using the expired number. The IRS will process that return and treat it as a return filed on time. However, the IRS won’t allow any exemptions or credits to a return filed with an expired ITIN.

Taxpayers will receive a notice telling the taxpayer to renew their number. Once the taxpayer renews the ITIN, the IRS will process returns normally.

Not Hiring a Professional

Doing taxes on your own especially if you don’t have the expertise it can be very costly. You don’t only have to make sure that you don’t mistype or miss any information, but you also have to make sure that you are using the correct information on your returns. Claiming the right credits and deductions is a complex task and if you are not sure that you are doing them correctly, it is best to leave it to the professional.

An enrolled agent can help you handle your taxes accurately.

FAS focuses on providing financial insights that can help you and your business. If you need assistance with bookkeeping, business and/or individual income tax return preparation or cross-border income tax preparation and filing, feel free to contact us! You can reach us at admin@fas-accountingsolutions.com or at 713-855-8035.